Financial Data and Key Metrics Changes - The company achieved same-property revenue growth of 3.3% for 2025, which was at the high end of guidance and 30 basis points ahead of original projections [10][12] - FFO per share growth is expected to be flat year-over-year for 2026, reflecting a conservative modeling approach due to redemptions within the Structured Finance portfolio [13][14] - Same-property NOI growth is forecasted to increase by 2.1% at the midpoint for 2026 [12] Business Line Data and Key Metrics Changes - The fourth quarter saw a blended lease rate growth of 1.9% and occupancy increased by 20 basis points sequentially to 96.3% [4][5] - Los Angeles showed the best occupancy improvement, increasing 70 basis points sequentially, indicating progress towards stabilization [5][28] Market Data and Key Metrics Changes - Northern California outperformed expectations due to technology sector expansion, favorable migration trends, and limited new housing supply [4][6] - Rent growth across most Essex markets outperformed the U.S. average, demonstrating the advantage of limited housing supply even in a soft employment environment [4][6] Company Strategy and Development Direction - The company anticipates steady West Coast fundamentals to deliver solid blended rent growth above the U.S. average in 2026, led by Northern California [6][7] - The investment market remains healthy with $12.6 billion of non-portfolio institutional multifamily transactions in 2025, a 43% increase compared to 2024 [8] Management's Comments on Operating Environment and Future Outlook - The management noted that job growth is moderating, and major employers are cautious about hiring, which could temper near-term demand acceleration [6][7] - There is optimism regarding Northern California's recovery, supported by increased VC funding and positive office absorption [20][22] Other Important Information - The company is well-positioned from a funding perspective, with free cash flow covering dividends and planned capital expenditures [14][15] - The structured finance book is expected to stabilize, with a focus on new opportunities to backfill redemptions [60] Q&A Session Summary Question: Thoughts on demand for assets in Northern California and Seattle - Management acknowledged that Northern California is recovering, with job openings at top tech companies showing stability, while Seattle faced softness in the fourth quarter [18][21] Question: Expectations for new and renewal lease blends - The company expects new leases to grow flat to 2% and renewals around 3%-4% for the year [24] Question: Performance expectations for Los Angeles - Management indicated steady improvement in occupancy, with hopes to reach stabilization at 95% soon [28][29] Question: Cap rates and investment opportunities in Southern California - The company noted a healthy environment with transactions occurring in the 4.5-4.75 cap rate range, and they will evaluate opportunities to create value [35][39] Question: Legislative impacts on rental housing - Management reported no significant impact from immigration policies, with trends returning to pre-COVID levels [55][100] Question: Changes in move-in pace from outside core markets - An increase in immigration trends was noted, particularly in the northern region, driven by return-to-office policies [100]

Financial Data and Key Metrics Changes - The company achieved same-property revenue growth of 3.3% for 2025, at the high end of guidance and 30 basis points ahead of original projections [10] - FFO per share growth is expected to be flat year-over-year for 2026, reflecting a conservative modeling approach [13][14] - Same-property NOI growth is forecasted to increase by 2.1% at the midpoint for 2026 [12] Business Line Data and Key Metrics Changes - Blended lease rate growth was 1.9% in the fourth quarter, with occupancy increasing by 20 basis points to 96.3% [4] - Los Angeles showed the best occupancy improvement, increasing by 70 basis points sequentially [5] - The company anticipates blended lease rate growth of 2.5% at the midpoint for 2026, with new leases expected to range from flat to 2% and renewals around 3%-4% [24] Market Data and Key Metrics Changes - Northern California outperformed expectations due to technology sector expansion and favorable migration trends [4] - Rent growth across most Essex markets outperformed the U.S. average, demonstrating the advantage of limited housing supply [4] - Seattle experienced soft performance in the fourth quarter, with several corporate layoffs impacting expectations [21] Company Strategy and Development Direction - The company plans to continue evaluating opportunities and allocate capital with a focus on creating shareholder value [9] - The investment strategy emphasizes FFO per share and NAV per share accretion, targeting investments with higher growth profiles [35] - The company is cautious about new developments, indicating that significant reductions in land prices or substantial rent growth are needed for new projects to be economically viable [49] Management's Comments on Operating Environment and Future Outlook - The management noted a slow but stable economic growth outlook for the U.S. in 2026, with job growth expected to remain consistent [6] - There is a cautious approach to hiring among major employers, which could temper near-term demand acceleration [7] - The company sees potential for improvement in Northern California due to increased venture capital funding and positive office absorption trends [20] Other Important Information - The company reported $12.6 billion in non-portfolio institutional multifamily transactions in 2025, a 43% increase from 2024 [8] - The company has over $1.7 billion in liquidity and is well-positioned from a funding perspective [15] - Advocacy costs were $2 million in 2025, with expectations for minimal advocacy costs in 2026 [87] Q&A Session Summary Question: Thoughts on demand for assets in Northern California and Seattle - Management noted that Northern California is showing signs of recovery, with job openings at tech companies stabilizing, while Seattle's performance was soft due to layoffs [18][21] Question: Expectations for new and renewal lease blends - Management expects new leases to be flat to 2% and renewals around 3%-4% for the year [24] Question: Performance expectations for Los Angeles - Management indicated steady improvement in occupancy, with economic occupancy at 94.7%, close to stabilization [28] Question: Impact of immigration on demand - Management has not seen a direct impact from immigration but noted an increase in immigration trends in the northern region [101] Question: Legislative impacts on rental housing - Management is monitoring policy changes but has not seen significant adverse impacts from recent legislative trends [60][96]

Financial Data and Key Metrics Changes - In 2025, the company achieved same-store revenue growth of 3.3%, which was at the high end of guidance and 30 basis points ahead of original projections [9] - FFO per share growth was above the midpoint of guidance, reflecting strong operational performance [2] - The fourth quarter saw a blended lease rate growth of 1.9% and occupancy increased by 20 basis points to 96.3% [3][9] Business Line Data and Key Metrics Changes - The company reported improved occupancy in Los Angeles, which increased by 70 basis points sequentially, indicating progress towards stabilization [3] - Northern California outperformed expectations due to technology sector expansion and limited housing supply, while Seattle and Southern California followed [3][4] Market Data and Key Metrics Changes - The broader U.S. economy is expected to experience slow but stable growth, with job trends remaining consistent [4] - Northern California is projected to lead Essex markets in rent growth, followed by Seattle and Southern California, with total new housing supply expected to decline by approximately 20% year-over-year [4][5] Company Strategy and Development Direction - The company plans to continue evaluating investment opportunities with a disciplined focus on creating shareholder value [8] - The strategy includes reallocating capital into higher growth, fee simple acquisitions in Northern California, which are expected to provide better risk-adjusted returns [12] Management's Comments on Operating Environment and Future Outlook - Management noted that while job growth is soft nationally, Northern California is showing signs of recovery, particularly in venture capital funding and office absorption [19][20] - The company remains cautious about the unpredictable job environment influenced by public policy, which could temper near-term demand [21] Other Important Information - The investment market remains healthy, with $12.6 billion in non-portfolio institutional multifamily transactions in 2025, a 43% increase from 2024 [6] - Cap rates for highly sought-after submarkets are in the low 4% range, while the remaining submarkets are in the mid-4% range [7] Q&A Session Summary Question: Thoughts on demand for assets in Northern California and Seattle - Management indicated that Northern California is recovering, with job openings in tech companies showing stability, while Seattle has faced challenges due to layoffs but still has positive fundamentals [16][20] Question: Expectations for new and renewal lease blends - The company expects new leases to grow flat to 2% and renewals to be around 3-4% for the year, similar to 2025 [22] Question: Performance expectations for Los Angeles - Management noted steady improvement in LA's occupancy, with hopes to reach stabilization at 95% soon, driven by a decrease in supply [27][28] Question: Impact of concessions on San Francisco rent growth - The company clarified that concessions are not significantly affecting the recovery in San Francisco, which is currently about 9% above pre-COVID levels [30] Question: Cap rates and investment opportunities in Southern California - Management stated that transactions in Southern California have occurred in the 4.5-4.75 cap rate range, indicating a healthy investment environment [33] Question: Legislative impacts on rental housing - Management is monitoring legislative changes but does not expect significant impacts on their business from advocacy costs [86] Question: Changes in move-in pace from outside core markets - There has been an increase in immigration trends in Northern California, primarily driven by return-to-office policies rather than robust job growth [100]

ViO 234 Apartment Homes San Jose, CA F O U R T H Q U A R T E R 2 0 2 5 C R E D I T U P D A T E S E L E C T E D R A T I O S & C R E D I T R A T I N G S | Public Bond Covenants(1) | | | & Selected Credit Ratios | | | | | --- | --- | --- | --- | --- | --- | --- | | Q4 '25 | | Q3 '25 | Q2 '25 | Q1 '25 | Q4 '24 | Covenant | | Debt to Total Assets | 35% | 34% | 35% | 35% | 35% | < 65% | | Secured Debt to Total Assets | 4% | 4% | 4% | 5% | 5% | < 40% | | Interest Coverage | 510% | 517% | 524% | 532% | 540% | > 150 ...

Key Takeaways ESS posted Q4 core FFO of $3.98, missing estimates, but improved from $3.92 per share a year earlier.ESS saw same-property NOI rise 3.8% and occupancy improve to 96.3% in the fourth quarter.ESS reported interest expense up 7.1% year over year, partly offsetting revenue and NOI growth.Essex Property Trust Inc. (ESS) reported fourth-quarter 2025 core funds from operations (FFO) per share of $3.98, missing the Zacks Consensus Estimate of $4. This compares favorably to the FFO of $3.92 per share a ...

For the quarter ended December 2025, Essex Property Trust (ESS) reported revenue of $479.63 million, up 5.5% over the same period last year. EPS came in at $3.98, compared to $4.00 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $476.57 million, representing a surprise of +0.64%. The company delivered an EPS surprise of -0.52%, with the consensus EPS estimate being $4.00.While investors scrutinize revenue and earnings changes year-over-year and how they compare with ...

Essex Property Trust (ESS) came out with quarterly funds from operations (FFO) of $3.98 per share, missing the Zacks Consensus Estimate of $4 per share. This compares to FFO of $3.92 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an FFO surprise of -0.52%. A quarter ago, it was expected that this real estate investment trust would post FFO of $3.96 per share when it actually produced FFO of $3.97, delivering a surprise of +0.25%.Over the last four q ...

Financial Performance - Reported Net Income per diluted share for Q4 2025 was $1.25, down 68.8% from $4.00 in Q4 2024; full-year Net Income per diluted share was $10.40, a decrease of 9.9% from $11.54 in 2024[9] - For the three months ended December 31, 2025, net income available to common stockholders was $80.573 million, compared to $257.453 million for the same period in 2024[44] - Net income available to common stockholders for the twelve months ended December 31, 2025, was $669.7 million, compared to $741.5 million for the same period in 2024, reflecting a decrease of 9.7%[59] - Earnings from operations for Q4 2025 were $152.1 million, down from $304.5 million in Q4 2024, indicating a decline of 50%[59] - Net income per share - basic for Q4 2025 was $1.25, compared to $4.01 in Q4 2024, a decrease of 68.8%[59] Funds from Operations (FFO) - Core FFO per diluted share increased by 1.5% in Q4 2025 compared to Q4 2024, and by 2.2% for the full year, driven by same-property revenue growth[9] - Funds from operations (FFO) attributable to common stockholders and unitholders for Q4 2025 was $262.977 million, a 6.9% increase from $246.014 million in Q4 2024[62] - FFO per share-diluted increased by 6.8% to $3.94 in Q4 2025, compared to $3.69 in Q4 2024[62] - Total FFO for the twelve months ended December 31, 2025, was $1.065136 billion, slightly up from $1.063878 billion in 2024[44] - Core FFO attributable to common stockholders and unitholders for the twelve months ended December 31, 2025, was $1.063 billion, slightly up from $1.064 billion in 2024[62] Revenue and Growth - Same-property revenue and NOI grew by 3.8% in Q4 2025 compared to Q4 2024, and by 3.3% and 3.2% respectively for the full year, exceeding original guidance[9] - Rental and other property revenues for Q4 2025 were $477.3 million, up from $452.1 million in Q4 2024, representing a 5.5% increase[59] - In Q4 2025, same-property gross revenues increased by 3.8% to $414.848 million compared to $399.520 million in Q4 2024[86] - Year-to-date (YTD) gross revenues for 2025 reached $1.643 billion, reflecting a 3.3% increase from $1.590 billion in 2024[88] - The average monthly rental rate for same-properties rose by 2.3% to $2,720 in Q4 2025 from $2,660 in Q4 2024[86] Acquisitions and Dispositions - The company acquired seven apartment communities for a total of $829.4 million and disposed of five for $563.8 million in 2025[9] - The total number of apartment community acquisitions in 2025 was 1,523 homes, with a total contract price of $829,375,000, averaging $534 per apartment home[101] - The company disposed of 1,230 homes in 2025, with a total contract price of $563,805,000, averaging $496 per apartment home[101] Capital Expenditures - The company plans approximately $100 million in revenue-generating capital expenditures for 2026[26] - Total revenue generating capital expenditures for Q4 2025 amounted to $21,836,000, with same-property portfolio expenditures at $20,193,000[94] - The average capital expenditures per apartment home in Q4 2025 was $524, totaling $2,258,000 over the trailing four quarters[94] - The company incurred $28,947,000 in non-revenue generating capital expenditures in Q4 2025, totaling $124,318,000 over the trailing four quarters[94] Debt and Liquidity - As of December 31, 2025, the company had over $1.7 billion in liquidity[21] - Unsecured debt, net, rose to $6.016 billion in 2025, compared to $5.474 billion in 2024, with a weighted average interest rate of 3.7%[68] - Total debt as of December 31, 2025, is $6,800,269,000, with a debt to total assets ratio of 35%[75] - The company’s mortgage notes payable, net, decreased to $784.348 million in 2025 from $989.884 million in 2024[67] Operational Metrics - Financial occupancy rate for Q4 2025 is 96.3%, with delinquency as a percentage of scheduled rent at 0.5%[79] - Same-property net operating income (NOI) for Q4 2025 is $291,217,000, reflecting an operating margin of 70%[79] - Total property operating expenses for Q4 2025 amount to $141,500,000[79] - Total same-property operating expenses for Q4 2025 were $123.631 million, a 3.8% increase from $119.049 million in Q4 2024[89] Future Guidance - 2026 guidance for Core FFO per diluted share is projected to be between $15.69 and $16.19, with a midpoint of $15.94[23] - Estimated same-property revenue growth for 2026 is projected to be between 1.70% and 3.10%, with a midpoint of 2.40%[23] - The company anticipates potential challenges in maintaining occupancy rates and rental demand due to competition and economic conditions, which may impact future performance[54] - The company expects a blended rate growth of 2.5% for 2026, driven by lower supply offsetting soft U.S. job growth[115] Ratings and Compliance - The company holds a Baa1 rating from Moody's and a BBB+ rating from Standard & Poor's, both with a stable outlook[75] - The company’s ability to comply with public bond covenants may be affected by changes in operating and financial performance, which is critical for maintaining financial stability[142]

Key Takeaways AVB is expected to report moderated Q4 results after cutting 2025 revenue, NOI and core FFO guidance.ESS is likely to post modest revenue growth, with West Coast demand offset by pockets of supply pressure.MAA is expected to see rent pressure from elevated Sun Belt supply and higher concessions.We are in the middle of the current reporting cycle, and the real estate investment trust (REIT) space is buzzing with activity, with several earnings releases lined up for this week. Among the resident ...

Core Insights - Essex Property Trust, Inc. (ESS) is expected to report its Q4 and full-year 2025 results on February 4, with anticipated year-over-year growth in revenues and core funds from operations (FFO) per share [1][10] Company Performance - In the last reported quarter, Essex Property achieved a core FFO per share surprise of 0.25%, driven by growth in same-property revenues and net operating income (NOI), although higher operating and interest expenses dampened results [2][10] - Over the past four quarters, Essex Property's earnings have consistently exceeded the Zacks Consensus Estimate, with an average surprise of 0.76% [3] Market Conditions - The US apartment market showed signs of softening in Q4 2025, with net move-outs of approximately 40,400 units, marking the first seasonal pullback in three years [4] - Supply pressures remain significant, with about 409,500 units delivered in 2025, including 89,400 in Q4, leading to a decline in occupancy to 94.8% and a 1.7% decrease in effective asking rents quarter-over-quarter [5] - Coastal and tech-oriented markets like New York and San Francisco continue to experience modest rent growth, while supply-heavy markets such as Austin and Phoenix face more significant rent pressures [6] Projections and Estimates - The Zacks Consensus Estimate for Essex Property's Q4 revenues is $476.57 million, reflecting a 4.86% year-over-year increase, with same-property revenues estimated at $414.75 million [9][10] - For Q4 2025, core FFO per share is projected to be between $3.93 and $4.03, with the consensus estimate remaining at $4.00, indicating a 2.04% year-over-year increase [11] - For full-year 2025, core FFO per share is expected to be in the range of $15.89 to $15.99, with a consensus estimate of $15.97, representing a 2.37% year-over-year increase on revenues of $1.88 billion [12] Challenges Ahead - Essex Property may face leasing challenges in Q4 due to elevated supply impacting rent growth and occupancy, alongside persistent higher interest expenses [8][10]